Deutsche Bank Divests from Elbit but Advises Clients to 'Buy'

Germany's Deutsche Bank has divested from Elbit because of its technical support for the security barrier, but still advises clients to "buy."

By Hana Levi Julian

First Publish: 5/30/2010, 1:24 PM / Last Update: 5/30/2010, 1:39 PM

Flash 90

Germany's largest bank has divested from Israel over the construction of the security barrier, aimed at preventing terrorists from reaching the nation's high-density cities, but still advises its clients to buy shares in the company.

The International Physicians for the Prevention of Nuclear War, and Pax Christi, a Catholic nongovernmental organization, called on Deutsche Bank AG to divest from the NASDAQ-listed Elbit Systems (ESLT), an Israeli defense company. The bank was one of Elbit's largest shareholders.

Deutsche Bank CEO Josef Ackerman responded to the pressure by announcing Thursday at a shareholders' meeting that the bank had sold all its 50,000 shares in Elbit Systems. Ackerman declined to give a reason for the divestiture..

Elbit provides the technology for the security barrier still being built along the outskirts of Judea and Samaria. The route runs close to the former “Green Line” in what the former Olmert administration was hoping would approximate a possible future border for a new Palestinian Authority country.

Both non-governmental groups issued a joint statement Friday calling their divestiture campaign “a major success.” The two have joined the Palestinian Authority in fighting the security barrier, most of which has been built since terrorist attacks inspired by the second intifada murdered hundreds of Israeli civilians in 2002 and 2003. The existence of the barrier has since reduced the number of successful terror attacks in Israel's heartland.

However, the International Court in The Hague issued a non-binding ruling several years ago that the barrier violated international law.